Wall Street is back in the red Thursday as markets react to ongoing tariff tensions and new concerns over the AI boom's staying power. The Dow Jones Industrial Average (DJI) dipped 0.9%, while the S&P 500 (GSPC) lost 1.4%. The tech-heavy Nasdaq Composite (IXIC) led the losses, sinking 1.8% as chip stocks dragged the index lower.
Markets are giving back Wednesday's gains after disappointing guidance from Marvell Technology (MRVL), which fueled fears that the AI-driven rally is losing steam. Meanwhile, trade uncertainty looms, with the Trump administration announcing only temporary exemptions on tariffs for Mexico, leaving Canada’s status unclear.
Market Movers:
- Marvell Technology (MRVL) -16%: Shares plunged after its latest earnings report showed a weaker-than-expected sales forecast. Investors had been hoping AI demand would significantly boost growth, but the company's outlook suggested otherwise, renewing concerns about the durability of the AI chip boom.
- Nvidia (NVDA) -4.6%: The stock has slid nearly 10% since its earnings release last week. The chip giant has now dropped about 24% from its mid-January peak as traders grow increasingly nervous about softening AI demand, regulatory risks, and a general cooldown in semiconductor enthusiasm.
- Macy’s (M) -1.2%: Shares dipped after the retailer posted disappointing same-store sales growth for the fourth quarter and issued cautious guidance for 2025. The company’s revenue outlook missed Wall Street's expectations, reflecting broader retail sector concerns amid ongoing tariff threats.
Tariff Jitters Keep Pressure on
Trade uncertainty is adding fuel to today's sell-off, as President Trump's team confirmed that tariffs on USMCA partners Mexico and Canada remain partly in place. While Mexican imports received a temporary exemption until April 2, no such clarity was provided for Canadian goods. Comments from Commerce Secretary Howard Lutnick that USMCA-compliant goods might be spared offered some relief, but the lack of a full resolution is keeping markets on edge.
Job Market Showing Mixed Signals
Labor data released Thursday showed initial jobless claims fell to 221,000 last week, a better-than-expected result. However, continuing claims ticked up to 1.89 million, suggesting people are struggling to find new employment after layoffs. Additionally, February's job cuts spiked 245% from January, raising fresh concerns that the labor market may be softening, particularly in government sectors and retail.
Retail Sector in Trouble
It’s been a brutal week for major retailers. Macy’s weak guidance followed disappointing outlooks from Best Buy (BBY), Target (TGT), and Abercrombie & Fitch (ANF). Executives have pointed to tariffs as a looming headwind, as higher costs threaten already-tight margins. With consumers becoming more cautious and supply chain costs at risk of climbing again, the retail rebound narrative is facing real tests.
Looking Ahead
Investors are bracing for more volatility as the tariff situation develops and AI-driven tech stocks continue to stumble. Eyes will remain on Washington for updates on trade policy, while upcoming jobs data and inflation readings could shape the Federal Reserve's next moves. For now, the market's momentum is squarely to the downside as growth concerns take center stage.